Funds hike charges despite poor results

TENS of thousands of investors in some of Britain's biggest fund managers have suffered hikes in fees of nearly £80m - even though performance on some schemes has lagged the market.

According to a survey by Bestinvest, Credit Suisse, M&G, Investec and Henderson have raised charges on several funds, typically by a fifth from 1.25% to 1.5% a year over the past two years. In many cases, though, returns to investors have struggled - despite strong stock markets.

In April 2005, Credit Suisse hiked fees on its £980m Income and £370m Monthly Income funds from 1.2% to 1.5%, netting the group an extra £4m a year for doing nothing more. Since then, the funds have delivered returns of 41% and 38%, while the FTSE All-Share is up 44%.

In contrast, the top performer in the sector was Invesco Perpetual Income, which soared 59%. Its annual fee rose from 1.25% to 1.5% in